Question
Which of the following is most true in relation to legal actions against an auditor? a. If liability is established, the judgement against the auditor
Which of the following is most true in relation to legal actions against an auditor?
a. If liability is established, the judgement against the auditor cannot be reduced if management were also at fault
b. Liability will be established if a shareholder demonstrates that a duty of care was owed to them by the auditor, the duty was breached and the shareholder suffered damage
c. In order to establish reasonable forseeability and proximity to third parties, the auditor must have issued an unmodified audit opinion
d. Liability to third parties exists only when the auditor induces the third party to rely on the financial report.
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